Explore Special Offers & White Papers from ADMIS

Cold Storage Report

HOGS

Demand news looks quite positive short-term as the monthly cold storage report showed total frozen pork inventory fell in July to the lowest level for any month in nine years. In addition, US and China trade officials reaffirmed the phase 1 trade deal in a phone conference call overnight. The cold storage news comes on the heels of news that China imported a record 430,000 tons of pork in July. Frozen pork supply at the end of July came in at 458.9 million pounds, down from 460.2 million pounds at the end of June and 611.7 million pounds last year. Stocks were down just 0.3% for the month as compared with the 10-year average decline of 2.8%. While a bit overbought, the short-term news flow may hold the market in a consolidation.

CATTLE

The bearish cattle-on-feed report on Friday combined with talk of the overbought condition of the market helped to trigger a gap lower opening yesterday and the market is threatening to break-out to the downside of the April-August uptrend channel. In order to expect a further downside correction, the market will need to see weakness develop in the beef market and an increase in the slaughter pace. The bearish tilt to the USDA cattle on feed report would suggest the slaughter pace can pick up, but beef demand remains surprisingly strong. If beef prices stay firm, it is unlikely to see a setback in cash markets. However, the hot and dry conditions for much of the Western US is a serious supply threat as cattle move to feedlots or to the market in areas which have seen a loss of pasture and range conditions. The break over the last few days could be a result of this “fear” of a bulge in beef production short-term.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started